Charging Orders Rising For Bad Debt Management Cases

Debt rescue specialist Payplan has warned that increasing numbers of unsecured lenders are now applying for Charging Orders to secure debt against residential property.

The business said that it regularly witnesses people making the mistake of prioritising credit card debt repayments about more important debts such as mortgages, believing that repossession simply "won't happen to them".

John Fairhurst, managing director of Payplan, said that the recent rises in repossessions show how urgent this problem has become but applauded the introduction of government guidelines on repossessions.

He explained: "Increasing numbers of unsecured lenders are now also applying for charging orders which allow them to seek For Sale Orders if repayment arrangements are not maintained."

Fairhurst said that it is becoming increasingly evident that mortgage lenders are not always aware of the other debt that individuals are carrying when they take out a mortgage.

He added: "Without understanding the full problem they are unable to offer a sustainable solution. Hopefully, new [government] guidelines will improve communication between borrowers and lenders, and allow for better understanding from both sides.

"In our experience many people worry that their home will be at greater risk if they admit the full extent of their problems. This is simply not the case, we find that it is almost always possible to both save the home and reduce debt repayments to an affordable rate."

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